Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.)How much interest (in dollars) will the firm pay on the 90-day loan?Find the 90-day rate on the loan.Annualize your result in part b to find the effective annual rate for this loan, assuming it is rolled over every 90 days throughout the year under the same terms and circumstances.

1. The computation of interest amount paid as follows: The following formula is used for the…

Answered: Data Back-Up Systems has obtained a…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 21MC: A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an...

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Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.)

How much interest (in dollars) will the firm pay on the 90-day loan?
Find the 90-day rate on the loan.
Annualize your result in part b to find the effective annual rate for this loan, assuming it is rolled over every 90 days throughout the year under the same terms and circumstances.

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